Ark Angel Ltd v The Commissioners For HMRC
Decision date: 22 August 2024
Neutral citation: [2024] UKFTT 772 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned two Schedule 16 assessments alleging overclaimed CJRS payments for two employees of Ark Angel. The tribunal admitted HMRC's slightly late submissions, held that the employees' "period of furlough" began only when the written agreement required by paragraph 6.7 was met (17 April 2020), and decided that the employees were employed by Ark Angel throughout 2019/20 so their reference salary must be averaged over that tax year (subject to paragraph 7.3 exclusions). The tribunal found evidence that Kulvinder did not work for connected employers in May–June 2021 and gave directions for the parties to agree sums or return to the tribunal; limited corrections to the earlier Decision will be made under Rule 37.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The tribunal's ratio is that, for CJRS purposes, an employee's "period of furlough" begins only when the specific written agreement in paragraph 6.7 is satisfied; consequently furlough here began on 17 April 2020. Relatedly, irregular or ad hoc pre-contract payments do not prevent a person being treated as employed for the whole 2019/20 tax year, so reference salary is calculated by averaging pay over that year (excluding amounts disregarded by paragraph 7.3).
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment suggests (obiter) that arrangements involving irregular or ad hoc payments may be treated similarly to zero‑hours style employment for reference‑salary purposes, and that Rule 5/the overriding objective can justify admitting short, slightly late submissions where fairness requires considering both parties' cases.